Wholesaling

Hi Julie I'm just starting as well... And I just had that same situation 2 weeks ago. I put it under contract and ended up back out before the time using the contengencies. Remember your contracts are pretty much just paper and locking it up... If it isn't what you want back out. It's free if worded right.

For the assignment part you should already know what your end buyer wants... and general info about the property before... and also visibaly see the property/talk to the owner to know/see more and it also helps with negotiating on the offer you make.

Hey guys, I never waste time looking at properties before making an offer. I figure out what the ARV is then subtract any repaires needed (I get this from the listing agent or the owner if it's a FSBO) and the figure my max offer based on my buyer's criteria and then add my assignment fee. The asking price never comes into play unless it's lower than my max offer. When I get the property under contract that's when I will go and inspect the property using my 15 day inspection period. Hope this helps!

Best of luck!
Mark

Yep Mark thanks... Lets me know I'm on the right track so far. That's why I like all the exit stats they teach... Done right it's failsafe

Your End Buyer will do whatever inspection they want to have done. You will be assigning it to them, so there is no need for you to have any type of inspection.

Your contract can say that you have the right to renegotiate your offer price based on your inspection results. Therefore you can use your best guess on the repair amount when figuring up your initial offer, then after it's under contract, you can call a couple of rehabbers to get free estimates to make sure your guess wasn't way off.

Or, you can just add whatever fee you want to make on top of whatever amount you have offered to buy it for, and shop the deal around to your buyers. If your numbers are way off, you won't be able to move the deal. If the numbers are good, then your buyers will snatch it up quickly.

Hope this helps,

Thank you all for your input. It was very helpful. It's good to know that I have fellow travelers. God bless you all.BJ

Thanks, so much for the help. It's good to know that I have dfellow travelers on this journey.

Thanks, so much for the help. It's good to know that I have dfellow travelers on this journey.

Julie,

Congrats on finding a property. Absolutely lock it up (i.e. get it under contract) before driving out or before your buyer's drive out to see the property.

Now that being said, there are some things that you are going to need to know:

ARV -- you gotta get some comps, either from your RE Agent on your team or PropTrend, or somewhere (NOT Zillow).

Repairs -- use what the Seller is telling you and then some (they are not Estimators either).

Make sure to include your contingency(ies) in the offer & contract.

Apply the MAO formula to determine your offer. [MAO is Maximum Allowable Offer]
MAO = After Repair Value x {about} 0.60 - Repairs - Your Wholesale fee.
e.g. $100,000 ARV x 0.60 - $18,000 Repairs - $5000 Wholesale fee = $37,000 MAXIMUM ALLOWABLE OFFER.

NOW that you have the property under contract with all of the above, you can have your Buyer(s) go see the property and you can too, if you want.

Congrats and keep at it!

--Walter

"If it is to be, it is up to me". -Anon

Thank you for the above information. I would like to network with you. I am a newbie and I would like to add you to my VIP B&S Lists. Would you PM me a detailed criteria, email and your best contact number? I come across great deals all the time and would like to see if you would be interested in any.

Look forward to networking and closing many, many profitable deals with you.

Best Wishes

Good job, and keep up awesomeness

how much do they asking for, or should be and would we get it back?

I have always jumped on something b4 I thought it thru, it seems to have worked well most of the time. By the time u people are figuring out the ARV and repairs and figured out every little detail, I already called the seller, listened to his/her story got the price as low as I cud, emailed them the agreement and had them sign it and email it back to me, added my profit and plastered the internet with photos and my phone number. I don't care about the ARV and repairs. If I can't sell it, I renegotiate the price down even lower with the seller or walk away, all I've lost is my $2 earnest money. I have lost a few little earnest deposits, and I've got a few healthy checks. With so little to lose, why not jump?
Rando

Always lock it up first

As a new investor I would always recommend inspecting properties just so you can gain experience what it is like, also to help determine rehab values. But when you have some deals under your belt then don't inspect until you have it under contract. And most of the time when you are wholesaling, your buyer will do the inspecting for you. If he likes the deal then away you go. If not, then you have 2 choices. Cancel the contract, or renegotiate. I always re-negotiate, if the seller doesn't want to budge I let them cancel the contract not me.

The biggest hurdle is just make the contract, don't worry about the rest. Control the property, then you have something to work with, otherwise you can't make any deals happen.

Mikessler
Advisor

I've heard that we can't use contracts other than what the CA realtors use. Is there a way to do wholesale or an instrument/document to lock deals up that's not time consuming or complicated?

If you see a property that you think is a good deal, lock it up. Then worry about the inspection. You have a 14 day inspection period in your contract. That will give you time to do your due diligence (have someone who knows about repairs to look at it for you) and find comps. Once you get a good idea what the approx ARV will be, market it to your cash buyers or on C/L or any other way you want to market it. If it is a good deal, you don't want to wait because someone else will come along and put it under contract before you do! Hope this helps.
Shirley

You do not have to use a realtor's purchase agreement unless it is listed with a realtor. If it is, they use their own. I'm not sure if that was your question or not, but I use a 2 page purchase agreement for FSBOs. You have to make sure it is compliant with your state laws. The way I got mine was to use one of my investor friend's contracts (who is in the same state as me). I knew he was closing using these contracts so I knew it was okay. You might want to do the same thing. If you know someone in that state who closes deals, ask them if they have a shorter version you can use.
Shirley

Thanks Shirley. I'll ask other investors in the club & other California DG-ers if they can share. I know Anita has a pre-filled realtor's form but not sure if she has one for FSBOs.

If I buy a '67 singlewide in a great area and I put 24k gold countertops in the kitchen and bath...how much will my '67 singlewide be worth?? It will be worth as much as a '67 singlewide + the cost of 24k gold countertops.

This whole ARV thing WILL MAKE YOUR BRAIN HURT !!...but pay attention because this is where the money is made. Hmmm... money.

"Step #1 Know What A DEAL Is !!! "-michaelmangham

Great discussion guys. Keep it comin'

How do you get comps? Do you always have your realtor pull comps on all the properties that look interesting, and before you even make an offer on those properties? If not, than how do you figure your Maximum offer allowance?
Thanks.

Nice to see you are sticking with it as they say Quitting is forever and pain is temporary good job plan E

Prevac, I am in San Diego and I use the CAR as they call it the Ca purch agreements, I asked that question too last yr and my coaches & local RE investors said to just use the state contract because it includes all of the things that we need in our agreements, it is long for sure like 10 pgs but it has all of the items we need unless anybody else thnks otherwise that is here in CA. I am making offers off of the MlS but will be soon making offers to fsbo's, my bandit signs should arrive tomm and I am going to put them out or have this guy for me, havent decided yet because he is kind of expensive.

and make it easy!!

link below

Mike

I am newbie investor I read what you said to julie, I can go out and look for any property, for sale by owner, or if it have a sign by the agent said for sale, or if it is distress any one can be lock up on that contract that say purchase agreement that's 14 days I have to do inspection and will give me time to do due diligence, I am trying to learn quick, I little confuse, I am not giving up! what is due diligence I remember what comps is the value of other houses like the one I would find in the same area am I correct, and then find the ARV. if you can help me out its highly appreciate God Bless You.

alot of good insites ,

Hi Mark, I am a newbie investor, and I am reading about the question julie ask you "For Help" I am trying very Hard to make my first deal I saw this house that a real-estate agent post with the sign in a yard in my neighborwood I took the number and his name,I know I have to call the agent, should I ask him to run a comp? I am not dum but I am taking in a lot here and getting confuse which one to apply first, another part pulling my teeth is the ARV, should I get quot on the house first.

PLS Help!!!

God Bless you all

Lorna

It's easiest to figure ARV by looking at "cookie-cutter" tract home neighborhoods. Look at a big city you are halfway familiar with on Zillow.(just for practice, Zillow isn't the answer to every...um...anything) Find a tract home area. Look at all the "sold" houses in that area. Divide the "sold price" by the square footage on each sold property to get "price per square foot" for each property. Then enter each "price per square foot" number into your calculator (you must be using a calculator or your brain would have exploded long ago) and divide that by the number of "sold" houses you entered= ARV. DO NOT use vacant, broken down, foreclosure fixers to find ARV. ONLY use nice, clean, (probably listed) RETAIL properties for your ARV comps.

Use comps from 1) The MLS is best. 2) Anywhere you can find them. Zillow,Trulia, totalviewrealestate, etc.etc. DO NOT use the Zillow Zestimate or any other .com "range of value" thingamajigs. Use individual properties ONLY.

And remember: there is NO exact-right answer. Average everything and round down to play it safe. Happy headaches!

Due diligence is the business term used to evaluate or investigate facts and details. In REI, your due diligence would be to find comps, find a buyer, and to get all the information you will need in order to wholesale the property. Also ask questions about the property so that you are prepared when you talk to the end buyer. All this constitutes due diligence on your part.

Shirley